Deck 10: Creating Effective Organizational Designs

Question 1

For firms facing complex and turbulent business environments

A) goals and objectives that are uncertain prevent opportunism.
B) traditional strategic controls are usually inappropriate.
C) complacency about predetermined milestones can prevent adaptability.
D) detailed plans are needed to maintain order.

Answer 1

B

Question 2

In firms with differentiation strategies,the culture should foster _____ levels of interdependence and rewards should be based primarily on _____ measures of output.

A) low; financial
B) low; behavioural
C) high; financial
D) high; behavioural

Answer 2

D

Question 3

Which of the following is not one of the characteristics of a contemporary control system?

A) It is a key catalyst for an ongoing debate about underlying data, assumptions, and action plans.
B) It must focus on constantly changing information that is strategically important.
C) It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
D) It generates information that is important enough to demand regular and frequent attention.

Answer 3

C

Question 4

Examples of firms that have built a culture around product quality are

A) Northern Telecom and Wal-Mart
B) Lexus and Hewlett-Packard
C) Four Seasons and Southwest Airlines
D) Cirque du Soleil and 3M

Question 5

Contemporary approaches to strategic control rely primarily on

A) feedback controls.
B) single-loop learning.
C) double-loop learning.
D) comparative learning.

Question 6

In terms of building a strong and effective corporate culture,Canada's Cirque du Soleil was described as focusing on

A) innovation.
B) customer service.
C) strategy formulation.
D) operational efficiency.

Question 7

The causes of counterproductive behaviour in organizations include

A) lack of a clear understanding of organizational goals and objectives.
B) motivated self-interest.
C) outright malfeasance.
D) all the choices are correct

Question 8

The primary drawback of "traditional" strategic control systems is

A) they are only appropriate when the environment is stable and simple.
B) goals and objectives cannot be measured with a high level of certainty.
C) they lead to complacency.
D) they lack the flexibility needed to adjust to changes in the environment.

Question 9

Effective short-term objectives have all of the following priorities except

A) an emphasis on "do your best" goals.
B) being achievable yet challenging.
C) providing a specific time horizon for their attainment.
D) being specific and measurable.

Question 10

External control mechanisms include all of the following except

A) auditors.
B) analysts.
C) competitors.
D) the market for corporate control.

Question 11

The "traditional" approach to strategic control is sequential.Which of the following is not one of the steps in the sequence?

A) Action plans are submitted by lower level managers
B) Performance is measured against the predetermined goal
C) Strategies are implemented
D) Strategies are formulated and top management sets goals

Question 12

Managerial opportunism

A) is a by-product of a cost leadership strategy
B) is limited by takeover constraint
C) is only a factor in global firms.
D) is encouraged by takeover constraint.

Question 13

In firms with related diversification strategies,the culture should foster _____ levels of interdependence and rewards should be based primarily on _____ measures of output.

A) low; financial
B) low; behavioural
C) high; financial
D) high; behavioural

Question 14

Most successful organizations minimize the need for explicit rules,regulations,and other boundaries by

A) posting written statements of the organization's goals and objectives.
B) discouraging the formation of subcultures that isolate work groups.
C) designing effective reward systems.
D) encouraging employees to see themselves as free agents.

Question 15

All of the following are characteristics of effective reward and incentive systems except:

A) performance measures are clear and highly visible.
B) the structure is fixed to assure employees of consistency.
C) the compensation system is perceived as fair and equitable.
D) objectives are well understood, and broadly accepted.

Question 16

McGill University's Prof.Mintzberg,writing about leaders and strategy,had observations which

A) said strategic control systems fail to detect changes in consumer demand.
B) "projected the past into the future."
C) encourage rigid planning and goal-setting processes.
D) cast doubt on the value of rigid planning and goal-setting processes.

Question 17

Which of the following approaches to behavioural strategic control should be utilized least in an organization in which there is a great need for innovation and a high degree of autonomy?

A) Culture
B) Rewards
C) Boundaries
D) All of the choices are equally important

Question 18

Which of the following is not one of the functions of reward and incentive systems?

A) They represent a poor means of influencing an organization's culture.
B) They focus efforts on high-priority tasks.
C) They motivate high levels of individual and collective task performance.
D) They represent an effective control mechanism.

Question 19

In firms with overall low cost strategies,the culture should foster _____ levels of interdependence and rewards should be based primarily on _____ measures of output.

A) low; financial
B) low; behavioural
C) high; financial
D) high; behavioural

Question 20

All of the following are examples of how organizational culture exerts behavioural control except

A) culture helps maintain control by creating behavioural norms.
B) culture generates unwritten standards of acceptable behaviour.
C) culture encourages individual identification with the organization and its objectives.
D) culture sets explicit boundaries.

Question 21

It is generally argued that the takeover constraint:

A) deters management from engaging in opportunistic behaviour.
B) deters management from considering acquiring other companies.
C) deters management from declaring dividends.
D) deters management from increasing a firm's level of borrowing.

Question 22

In a corporation,the primary participants include all except

A) the shareholders
B) the employees
C) management (led by the CEO)
D) the board of directors

Question 23

Feedback-based control systems measure outcomes and serve as a guide to corrective action.

Question 24

For firms competing in highly unstable and turbulent industries,"traditional" strategic controls are most appropriate.

Question 25

Continuous monitoring enhances an organization's ability to respond with speed and flexibility.

Question 26

Once a strong and healthy organizational culture has been established,it becomes self-sustaining.

Question 27

"Contemporary" strategic controls involve comparing actual performance to predetermined goals.

Question 28

Behavioural control systems use culture,rewards,and boundaries in a balanced and consistent way to achieve results.

Question 29

Different functional areas within an organization often have different reward systems.

Question 30

An organization's reward system is typically a weak method of motivating employees.

Question 31

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except

A) the desire to get future auditing contracts from the company.
B) the desire to get consulting work from the company because most audit firms also do consulting work.
C) the fact that auditors are appointed by the firm.
D) the failure of U.S. audit firms to follow internationally accepted accounting standards.

Question 32

Short-term objectives and action plans are types of boundaries that channel the efforts of employees toward goal accomplishment.

Question 33

By takeover constraint,we mean

A) constraints placed by the firm on raiders who want to takeover the firm.
B) legal constraints that limit the ability of the raiders to acquire a firm.
C) provisions in the charter of a company that prevents it from attempting a takeover of other companies.
D) the risk of being acquired by a hostile raider.

Question 34

In terms of corporate culture,Cirque du Soleil's focus is on customer service,not innovation.

Question 35

All of the following are types of information that all public corporations are required to disclose except

A) quarterly and annual filings of financial information.
B) stock trading by insiders.
C) details of new products under development.
D) details of executive compensation packages.

Question 36

Boundaries and constraints,when used properly,can minimize improper and unethical conduct.

Question 37

Sales quotas,operating budgets,and production schedules are examples of "traditional" controls.

Question 38

For a reward system to be effective,it must be perceived as fair and equitable.

Question 39

The U.S.Congress introduced the Sarbanes-Oxley Act in 2002 to ensure better governance of public corporations-similar provisions have NOT been put in place in Canada.

Question 40

Reward systems that reinforce an organization's core values and contribute to organizational cohesiveness are the least effective type.

Question 41

Discuss the contingent nature of strategic controls.How would controls be different for firms pursuing overall low costs strategies versus differentiation strategies?

Question 42

The Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly-listed companies must reveal off-balance-sheet finances and vouch for the accuracy of information provided.

Question 43

What are the four characteristics of effective contemporary control systems?

Question 44

Why is it important to have a balance among the three behavioural controls?

Question 45

The risk of being acquired by hostile raiders is often referred to as the takeover constraint.

Question 46

Product diversification by a company is a cheaper way to reduce shareholder risk than portfolio diversification by shareholders.

Question 47

What are the characteristics of short-term objectives? Provide examples of practical applications of these characteristics by organizations.

Question 48

Discuss at least three external control mechanisms.

Question 49

What are the three key means to align the interests of owners (shareholders)and managers in a corporation?

Question 50

In firms that follow related diversification strategies,reward and control systems rely on behavioural indicators since the organization needs to reward and reinforce behaviours that facilitate sharing and collaboration.

Question 51

Public companies are required by law to disclose information regarding executive compensation packages.

Question 52

Discuss the benefits of using reward and incentive systems as a means of strategic control.

Question 53

Action plans permit a degree of autonomy for managers who sometimes must modify activities to achieve the desired outcome.

Question 54

Unexpected events such as changes in consumer preference or new government regulations have little effect on short-term objectives that need to remain fixed to be effective.

Question 55

What are the "traditional" approaches to strategic control?

Question 56

Auditors are appointed by the Securities and Exchange Commission to audit a company's financial statements.

Question 57

The Sarbanes-Oxley Act of 2002 does not apply to Canadian publicly-listed companies operating in the U.S.that are listed on U.S.stock exchanges.

Question 58

Stock analysts generally issue more "sell" recommendations than "buy" recommendations.